Hankook Tire Q1 net falls 41 pct on high material costs, disrupted supplies

SEOUL-- Hankook Tire & Technology Co. said Wednesday its first-quarter net profit plunged 41 percent from a year earlier due to higher raw material prices and global supply chain disruption.

Net profit for the three months ended in March fell to 103.21 billion won (US$81 million) from 174.88 billion won a year ago, the company said in a statement.

"The lingering impact of a month-long strike in the fourth quarter weighed on the first-quarter results as it took some time to restore pre-strike utility rates," a company spokesman said.

Raw material costs jumped by 20 percent in the first quarter compared to a year earlier. In particular, the Russia-Ukraine war pushed up the prices of carbon black and synthetic rubber, he said.

Operating profit declined 32 percent to 126.07 billion won in the March quarter from 186.02 billion won a year before. Sales rose 11 percent to 1.79 trillion won from 1.62 trillion won.

To boost sales, Hankook Tire plans to launch the iON tire product for all-electric vehicle models in Europe this month and then in the domestic market and other global markets from August, the statement said.

Hankook Tire, the world's sixth-biggest tiremaker by sales, earns over 80 percent of its total revenue abroad. It has eight plants -- two in South Korea, one in Hungary, one in the United States, three in China and one in Indonesia -- whose combined capacity reaches 102 million tires per year.

Source: Yonhap News Agency